Condominium Shops Entice A Great Deal of Bidders

Condominium Shops Entice A Great Deal of Bidders

Jul 15 , 2023. By BEMNET TAFESSE ( FORTUNE STAFF WRITER. )

A ground floor of a condominium put up for commercial use auction near the Ministry of Revenue (Megenagna area) was sold for 111,000 Br and 126,000 Br for a single square meter.

Alem Tour & Travels and Tigist Debebe managed to secure the shops with respective prices where over 30,000 interested buyers grappled over several plots put up for auction by the Addis Abeba Housing Development Corporation. The heated competition forced officials to extend the deadlines for additional two weeks.

Under Corporation's administration, the 13 condominium sites built by the 40/60 scheme are located in Bole, Lemi Kura Akaki Kality and Addis Ketema districts.

Nearly 3,296 shops were up for grabs last week. Prospective buyers made their way to the Corporation's bureau on Dem. Rep. Congo St. around Greek Club to witness the opening of the nine-day auction.

The rainy weather did little to impede the excitement of participants, including real estate brokers, and company representatives who placed offers in hundreds of thousands for a single square meter.

The ground floors of 73 shops near the Megenagna area and near Unity University (Gergi area) garnered the most attention, with over 4,000 interested bidders gathering on the fourth day.

Officials disclosed that homes in these buildings were transferred to owners last year, with the bustling neighbourhoods hosting 29sqm to 320sqm shops.

Brokers have filled the area going left and right, distributing their business cards to potential sellers.

Bekele Dilnesaw, a broker who specialises in linking winners with potential buyers, indicated that some bidders are ready to pay inflated prices merely to secure the titles and sell them off immediately.

He is convinced that such bidders do not care about their offers since they do not intend to work in the shops or pay the remaining debt. He claims the interest rate and monthly instalments would become impossible to handle.

"It's an occasional business for many," he told Fortune.

Some individuals were wiped out by companies with a staggering difference they could not match up.

The large number of bidders and the limited amount of shops made it difficult to compete for Habtamu Sileshi, a veteran civil serviceman who was patiently waiting for the final announcements.

He offered 48,000 Br per square metre for the Megenagna site to try his luck in securing an asset. He believes that inflated offers by deep-pocketed institutions are pushing individuals out of the competition.

"I can't believe the numbers being called out," he told Fortune.

The winners are expected to come up with half of the total payment in 10 days while getting into a contractual obligation with the Commercial Bank of Ethiopia (CBE) to pay the remainder in instalments within a five-year period.

Natanim Degsew, who works in the housing transfer directorate at the Corporation, said the very purpose of organising such auctions is to make the newly constructed sites habitable by fostering business activity while it serves as a source of income for the city administration.

"We can't overlook the economic gains of such auctions," he told Fortune.

Bidders are required to provide a CPO constituting two percent of their offer for a given shop. The mode of payment in lump sums or instalments will not give the bidder a competitive edge, unlike land lease auctions, with the only criteria being the proposed offer.

The Corporation has garnered over 1.2 million Br from selling bid documents.

Tesfakal Tariku, a housing consultant, believes there should be a separate playing field for deep-pocketed corporations with a raised floor price that brings a huge sum to the coffers of the city administration rather than letting them compete with the average citizen.

"Equal playing field is expected," she told Fortune.

PUBLISHED ON Jul 15,2023 [ VOL 24 , NO 1211]

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